Rising prices in rents are one of the first signs of accelerating price inflation. In New York rental prices are rising and it is getting ever more difficult for tenants to find an apartment due to increasing demand. It’s a sign that people are less willing to hold on to cash balances and are ready to spend their money instead, which will stoke inflation. The opposite was true in 2009 following the financial collapse, as the desire to hold cash increased because of fears of a total economic collapse.
With the Federal Reserve’s manipulated boom under way there is less fear of a total collapse. And as interest rates start to rise the banks will start lending out all of the money that previously was parked at the Fed as excess reserves. Once that starts happening the money supply will dramatically increase, creating even more price inflation.
It’s a good time to buy gold and silver while they are cheap. Their prices will skyrocket once it becomes clear that inflation is out of control.
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